Entertainment competition goes up. More tv, more books, more movies, more games, more music. I don't think i can objectively quantify fun had in a game 10 years ago or a game now. However, I think we can agree that how people spend their leisure time is a pretty good indicator of how much fun activity X is. In the early 80's movies were more fun than video games for just about everybody. Now, you see moms playing games on the wii. I think video games are objectively more fun than the alternatives than they were with their alternatives 20 years ago.
That's because video game consoles are more popular, and they've become more accepted by the media.
30 years ago, my father and his brothers played Atari. I grew up with parents that both understood video games, at least somewhat. There's nothing objective about the way we view video games, or any other form of media.
For instance: I primarily look for media with some sort of emotional power, which is all-but-impossible to find in video games. I can think of perhaps five or six video games that had any emotional impact on me. I can name far more movies that have had a similar impact. My secondary search is for polish, and there movies also have an edge over modern games. The things I look for aren't what you look for, though - they're subjective. I remember having much more fun on an SNES than I did with, say, the Xbox. Your milage varies.
